God's Own Country lures investors with union-free fruit

CNBC-TV18's Ronak Jain reports that the Kerala government's assurances of an investment environment free of labour unions will not be enough

India Business Hour at 09:00 pm

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The Kerala government is turning on the charm as it looks to attract investors into its infrastructure sector. But CNBC-TV18's Ronak Jain reports that assurances of an investment environment free of labour unions will not be enough.

Kerala Chief Minister Oommen Chandy announced, "The entire situation has changed." With the declaration that Kerala is open for business sans the labour unions, the state government is hard-selling to get investments to fund a long list of infrastructure developement activities, such as the mega PPP projects like the Rs 1 lakh crore high speed rail corridor, the Rs 4,500-crore Kochi metro rail project, the Rs 4,500-crore Kannur international airport, the Vizhinjam international sea port, a petrochemicals investment zone, a smart city project and the mono rail project in Thiruvananthapuram.

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Apart from infrastructure, the government also wants to set up a Rs 52,000-crore national investment and manufacturing zone. PK Kunhalikutty, minister for industries and IT, Kerala, says, "For manufacturing we plan to construct a zone so we will be able to give the sector all clearances as early as possible and to provide world-class facilities to manufacturing giants eyeing to set up shop in the state."

But it's not going to be easy. Kerala has a 700 MW power deficit and the state electricity board's tariff revision proposals could increase costs for commercial users by 9%.

Kerala is also facing problems in land acquisition and has come under fire from the Centre for slow progress in the implementation of the national highway projects.